~ Condition of the Illinois Coal Industry 


With Respect to the Prospective Future 
Operation of Mines During the Coal Year 
1924-1925 


ILLINOIS GEOLOGICAL 


CTPIipVvey 
WOUINVE I 


LIGRA.Y 


MAR 18 1976 


May 1st, 1924 


Issued by 


THE ILLINOIS COAL OPERATORS ASSOCIATION 


1407 FISHER BUILDING 
CHICAGO, ILL. 


WHA OMT ULL 


05100010 


Status of Illinois Coal Mines 
As of April 30th, 1924 


With Respect to Continuance of Operation 
During the Present Coal Year and Later 


A survey, completed as of the above date, develops the fact that there were 397 potential 
coal producing mines in Illinois that within the past three years might directly or indirectly 
ship and that have shipped coal for a line haul by railroads. 


On page 3 will be found a detailed tabulation of all these mines showing their status 
as defined on page 2. 


Of the above total twenty-six (26) Illinois coal mines have been definitely abandoned 
and one hundred and twelve (112) mines closed indefinitely. These one hundred and thirty- 
eight (138) mines constitute thirty-five per cent (35%) of the total shipping mines of the 
state, produced twenty-one per cent (21%) of the total state output during the last full 
year of operation, and employed twenty-five per cent (25%) of the miners. In view of the 
care exercised in determining mines shown on the accompanying tabulation as “closed indefi- 
nitely,” we feel convinced that few or none of those so shown will open for at least a year, 
and it is our opinion that a minimum of sixty per cent (60%) of them cannot and will not 
operate while the present wage scale and competitive condition is continued. 


It is likewise our belief that a minimum of fifty per cent (50%) of the mines whose 
status is described as “not determined” may be similarly counted out. Half of both these 
classifications will doubtless be more or less permanently abandoned. 


Except there shall develop some unusual market condition later this year or next, which 
there is no reason whatever to expect, the maximum number of shipping mines that will at 
any time operate in Illinois during the next year or more will not exceed at most two hundred 
and fifty (250). 


The one hundred and ninety-seven (197) mines now working and shown as having pro- 
duced during the last full coal year, approximately fifty-one million (51,000,000) tons, 
have potential capacity at seventy-five per cent (75%) work time for the ready production 
of seventy-five million (75,000,000) tons per annum. These mines during the month just 
closed (April, 1924) operated less than two days per week. 


Adding the eighteen (18) mines known to be held idle only temporarily and some addi- 
tional mines otherwise classified and whose owners will undoubtedly feel disposed to “take 
a chance” on an improved demand during the Fall and Winter, we shall, regardless of the 
present apparent extreme curtailment of production, as a result of the large number of 
mines closed, have an ample capacity to produce on the basis of fuller running time at this 
smaller number of working mines, eighty million (80,000,000) to eighty-five million 
(85,000,000) tons of coal, which is substantially in excess of any probable requirements, 
particularly on the basis of previously existing market demand during the past three or 
more years when competitive conditions were distinctly more favorable than they are at this 
time. 


Among the large number of Ilinois coal operators from whom information was sought 
to make this survey accurate, there is apparent universal recognition of the fact that only 
those companies that are excellently financed, whether they be large or small, that have coal 
of fully representative character for their particular districts, whose mine management is 
alert and highly efficient, whose coal preparation is constantly maintained at a high standard, 
and who finally enjoy a large and dependable clientele earned by many years of high class 
merchandising methods,—can expect to “carry on” at all during an indefinite period, vari- 
ously estimated at from one to five years. | 


Page one 


That so large a number of Illinois operators have benefited by careful study of the past 
history of the coal industry of the state, and that the majority of them are not oppressed with 
current debt, which on many occasions in past years has compelled hopeless continuance of 
many mines, is one of the notable features of this survey. 


The previous most extreme depression in the coal industry occurred at the end of the 
six-year period from 1911 to 1915, when one hundred and ten (110) Lllinois mines closed 
down or were abandoned and there were left only 280 shipping mines in position to operate. 
At the end of that period twenty-four (24) companies, operating fifty-nine mines, and pro- 
ducing twenty-five per cent (25%) of the state output, were placed or continued in bank- 
ruptey or receivership, and some half dozen additional properties were later compelled to 
close down. The total valuation of these fifty-nine (59) mines, as represented by their 
outstanding stocks and bonds, approximated $28,000,000, and so far as the original stock 
and bond holders were concerned, they suffered a total loss of almost this amount. 


The properties shown on this tabulation as “abandoned” or “closed indefinitely” have an 
approximate value of $40,000,000, with, however, comparatively few of them in serious 
financial difficulties. The great majority of these shutdowns are due entirely to the recogni- 
tion of inability to compete with other coals under present conditions or those in prospect for 
a rather prolonged period. 


It has in consequence apparently seemed best to these operators not to ‘ hoy. good 
money after bad,” hence the action indicated by this tabulation. | 


How the Illinois Mines Were Classified 
The classifications shown on opposite page were arrived at in the following manner: 


MINES WORKING: Statement of owners that they were not only now working, 
but expected to be able to secure enough business to so continue throughout the year. 
Several properties operating when our second survey began, two months ago, and as per 
statement earlier made by owners, have been closed, either temporarily or indefinitely, 
because of the completion of some particular contract or order. 


TEMPORARILY CLOSED: Those mines which the owner stated or our own judg- 
ment and general information justified believing would be opened later on in the season. 
This, of course, applies particularly to properties that are undergoing more or less substan- 
tial repairs that would not be made unless the owners were reasonably certain they would 
operate the mine in the early future. 


IDLE—STATUS UNDETERMINED: Those mines that neither confidential 
ownership announcement and admission, or our own judgment, based on the present circum- 
stances and conditions, would permit our making other classification. ‘The comparatively 
small number of these mines (7%) indicates the definiteness of the policy determined by a 
great majority of the operators with respect to the coming year or more. 


INDEFINITELY CLOSED: Determined by announcement of owner or from 
our knowledge of an impossible financial status, which makes reopening out of the question 
under present conditions. This includes some properties that are in receivership or seriously 
involved financially and now idle,—as well as mines that during the past several months have 
defaulted on payrolls and are still idle, and particularly where such properties are well 
known high cost: producers, or their coal is below average in grade. . 


ABANDONED: Determined by announcement of owners or their removal of ¢ equip- 
ment necessary for the operation of the mine. 


LOCAL MINES: These are mines that having direct or indirect facilities for ship- 
ping and that are consequently listed in the State Coal Report as shipping mines, normally 
dispose of their entire output by teams and trucks or on a local switching arrangement or 
rate. ‘Their provision of line haul coal only occurs during periods of unusual market demand 
and high prices, a condition not apt to prevail again for some years. 


Page two 


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Industrial Mines In Illinois 


There are thirty-five (35) mines in the state of Illinois that are owned outright or under 
long term lease, by industrial concerns who take the entire output of such properties. 


The average annual production of these mines now amounts to 16,500,000 tons, with 
striking likelihood, under present circumstances, of further increase. 


Five Million (5,000,000) tons of this total has been lost by independent Illinois com- 
mercial operators since 1918. 


Division of the number of these mines into the annual output will indicate that they 
are mostly large producing mines (averaging 500,000 tons per year), and as a matter of 
fact they do show very much greater than average running time. The average work time 
at these properties having been 209 days for the coal year ending June 30th, 1921, and 193 
days for the coal year ending June 30th, 1923, in which latter period is included two months 
complete idleness during the five months strike of the mine workers in 1922. The general 
average of other shipping mines in the state was 174 days for 1921 and 146 days for 1923. 


Railroads, public utility and power plants, steel and iron, brick and gas companies, are 
among those who are concerned in such direct production of coal. 


This tonnage, of course, is by no means the total amount used by all industries of Illi- 
nois, or the total output of Lllinois mines that goes to industrial users generally in all 
markets. It represents, however, probably forty per cent (40%) of the total output of Illi- 
nois coal shipped to or used by railroads, industrial and manufacturing companies. 


In addition to this large volume of Illinois coal produced by consumers, industrial com- 
panies located in various parts of Illinois and immediately adjacent territory such as St. 
Louis, Missouri,—Milwaukee, Wisconsin,—Gary, Indiana,—and that part of the Chicago 
Switching District that is within Indiana, own and operate or have under long term lease 
the output of various eastern mines in non-union districts that are now providing to this 
above named section an additional 10,000,000 tons of coal per annum. 


Illinois Abandoned Mines 


In the present survey effort has been made to check every potential coal producing 
opening in the state that has direct or indirect railroad shipping facilities and to make such 
careful investigation as would show absolutely all mines that have been abandoned during 
the past three years, after which time it seldom or never happens that such a,plant is re- 
conditioned and operated except under the most extraordinary market conditions, which, 
too, would have to give definite promises of continuance through a substantial period to 
justify such reopening. 


The result of this survey shows that out of 397 potential producers for railroad dis- 
tribution, twenty-six (26) mines have been so abandoned, leaving the total number of poten- ~ 
tial shipping mines as three hundred and seventy-one (871). 


In the six-year period preceding the war, a large number of mining companies aban- 
doned all or a part of their shafts with no expectation of ever reopening them. In the 
period from 1916 to 1920, sixty (60) such old shafts were reopened, reconditioned and 
put to work. 


Meanwhile, during the same period (of the war), thirty-three (33) new mines were 
sunk at-various points in the state. 


It is interesting to note that in connection with the present situation in the Llinois coal 
industry, three (8) of these most recently developed new mines have already been aban- 
doned and seven (7) of them closed indefinitely. 


Page four 


A Retrospect 


The chart below shown is excerpted from page 39 of the Illinois Coal Operators 
Association publication “ILLINOIS MINERS EARNINGS 1918-1922,” which was 
released to the public in August, 1923. A similar earlier discussion of the same sort includ- 
ing this chart brought down to 1920, will also be found in the Illinois Coal Operators Asso- 
ciation publication “A Brief Outline of 25 Years History, etc.,” which was issued and released 
in June 1921. 


Those of you desiring to study this subject of mine variation in detail will find the neces- 
sary data on pages 36 to 39 of the 1923 publication, and on pages 17 to 23 of the 1921 book. 


‘‘Wide Variation in Number of Illinois Shipping Mines 


1900-1922 

No. of No. of 
otal Manes 
420 SS cues aoe ae SS 420 
4154 | Hairs 
410; — 410 
405 |] be Ce +++ 405 

400 ) 
soe 5 A Bb 
=e Od ae el TE Beno Kt BAe 
el A oA aie 
280|— A a ie Pa dd 
oe Paine |e a ic PON Be teat Ce 
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oe bas aaa he 
360 360 
B59 355 
350 350 
340 340 
335 335 
330 330 
325 325 
320 320 
315 315 

31 
ae i haa le prior eer wie hypo | ie 
G8) NSA od EGR 6 ae 
295 Sl Nad rel ae? 
290 
eg a SH Rd A acs 4 eas tie 
280 
oe i a a la oni bast =. 


$> 
The significance of this showing is clear. It is a definite index of what aie law of supply 
and demand does, through competition, when there is existent surplus producing capacity. 
That elimination of unnecessary mines is already underway is apparent—a'movement likely 
to continue for some time.” 


This present survey accounts for 397 openings that have been potential shipping mines 
within the last three years. The 1921 Illinois Coal Report showed 389 shipping mines. ‘Two 
(2) shaft and six (6) strip mines have meanwhile been developed. 


The present investigation going back to 1921, and accounting for all openings in the 
state from which coal can be shipped, would seem to indicate that not more than 250 shipping 
mines will at any time operate during the present coal year. 'This is 80 mines, or 11%, less 
than were operated during the year ending June 30th, 1915. 


Page five 


